Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Morrisey & Brown, Limited, of Sydney is a merchandising company that is the sole distributor of a product that is increasing in popularity among Australian

image text in transcribed

Morrisey & Brown, Limited, of Sydney is a merchandising company that is the sole distributor of a product that is increasing in popularity among Australian consumers. The company's income statements for the three most recent months follow: Morrisey & Brown, Limited Income Statements For the Three Months Ended September 30 July August Sales in units 6, 750 7,250 Sales $ 742,500 $ 797,500 Cost of goods sold 445,500 478,500 Gross margin 297,000 319,000 Selling and administrative expenses : Advertising expense 33,800 33,800 Shipping expense 69,500 73,700 Salaries and commissions 125,000 132,100 Insurance expense 9,900 Depreciation expense 22,100 22,100 Total selling and administrative expenses 260,300 271,600 Net operating income $ 36, 700 $ 47,400 September 7,750 $ 852,500 511,500 341,000 9,900 33,800 77,900 139,200 9,900 22,100 282,900 $ 58,100 Required: 1. By analyzing the data from the company's income statements, classify each of its expenses (including cost of goods sold) as either variable, fixed, or mixed. 2. Using the high-low method, separate each mixed expense into variable and fixed elements. Express the variable and fixed portions of each mixed expense in the form Y = a + bx. 3. Redo the company's income statement at the 7,750-unit level of activity using the contribution format

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Organizing Smart Buildings And CitiesPromoting Innovation And Participation

Authors: Elisabetta Magnaghi, VĂ©ronique Flambard, Daniela Mancini, Julie Jacques, Nicolas Gouvy

10th Edition

3030606066, 9783030606060

More Books

Students also viewed these Accounting questions

Question

=+b) Is this an appropriate method to display this data?

Answered: 1 week ago